Cal. -Asian marketplaces hot for South Sac
Date 2004/11/16 9:20:31 | Topic: Sac & N. California
| By Kelly Johnson
Sacramento Business Journal
Updated: 7:00 p.m. ET Nov. 14, 2004
Sacramento's hot market for Asian retail centers has spurred builders to propose three more of them, all within two miles of the one that kicked off the trend.
That one is the hugely successful Pacific Plaza, a 140,000-square-foot center across from Florin Mall that has rarely had shop vacancies or many empty parking spaces since it opened in 2000. It has already inspired a new, fully leased 42,000-square-foot Asian center, called Pacific Rim Plaza, that opens its stores across the street this month.
Developers of two more marketplaces have submitted plans to the city of Sacramento, one in this same cluster of shopping centers and another less than two miles away.
Plans are also being drawn up for yet another large Asian-themed shopping center next to Pacific Rim Plaza, although that proposal hasn't yet been sent to Sacramento County for review.
Pacific Plaza draws shoppers from Stockton to Redding and has become the retail and social hub for the local Asian community. Many of the shoppers and the shop owners are transplants from the Silicon Valley and the Bay Area.
The 2000 U.S. Census puts Sacramento County's Asian population at 11 percent, nearly even with the 10.9 percent figure for all of California.
But many local Asian-Americans left Silicon Valley for Sacramento after the dot-com bust of 2000 and 2001, and more are still coming. Some who were laid off from high-tech jobs sold their Bay Area homes for a bundle, then started their own shops or restaurants here.
While business is good at Pacific Plaza, with only one vacancy and little turnover, new Asian centers will find the first two years difficult, said Vannie Ly, Pacific Plaza property manager.
Still, she added, shop owners and consumers continue to clamor for more space in Sacramento.
"Oh my gosh," was Larry Carr's response when asked if Pacific Plaza remains busy. He's executive director of the Florin Road Partnership, a business- and property-improvement district. "It's turned into quite a regional draw," he said.
Other cities are seeing the same trend. In April, the Wall Street Journal reported that new mini-Chinatowns have sprouted up in such cities as Las Vegas, Minneapolis and Miami. Where no Chinatowns exist, developers are creating them with stand-alone shopping centers.
Planning Little Saigon: The two proposals awaiting city consideration are Little Saigon Plaza, a proposed supermarket-anchored 170,000-square-foot center on Stockton Boulevard south of Riza Avenue, and South Center, an 81,000-square-foot complex proposed for the southwest corner of Mack Road and Franklin Boulevard.
The center yet to be submitted to the city for review would measure 107,000 square feet on the north side of Pacific Rim Plaza.
Little Saigon Plaza would set itself apart by offering some units for sale. So-called commercial condos have become "a general trend now, especially in San Jose," said Paul Vu, whose San Jose-based family investment group owns the new Pacific Rim Plaza.
The concept is still relatively new in Sacramento, said Linda Nguyen, an attorney and general manager for Little Saigon Plaza LLC. Her parents Son and Hai Nguyen are managing members.
With commercial condos, there's a lack of control over the shop mix, Ly said. What if everyone opens the same type of business? she asked.
The Nguyen family has built about a dozen retail, office and warehouse projects in and around San Jose over the last decade. The San Jose family hopes to start building the 13-acre project in early 2005, to open in 2006. The Nguyens are not disclosing the project cost.
The center, with a supermarket of up to 40,000 square feet, would include some offices, restaurants, clothing and jewelry stores, hair and nail salons, and a cultural office, Linda Nguyen said.
"It's sort of like a social center," she said. "We feel there's a need to provide a social and business center for Asians in Sacramento."
The center also would help others learn about their culture, she said. In San Jose, the Nguyens have sponsored a Vietnamese festival and parade for seven years. The family will consider establishing something similar here, she said.
The family expects to close escrow on the land in January. It already owns eight adjacent acres on which the Nguyens want to build more than 200 low-income apartments.
A restaurant for 900: Down at Mack and Franklin, South Center would be anchored by a 20,000-square-foot Chinese restaurant that seats 900 people, said William Chan, project manager for the two Silicon Valley partners in the venture.
The 8.5-acre project would house about 25 tenants selling wares similar to those proposed at Little Saigon Plaza. South Center would consist of three buildings, one of which would be two stories tall with the restaurant on the second level. The architect is Innovative Design Architecture Inc. in Sunnyvale.
Mack Property Development, which owns a San Jose shopping center, hopes to start constructing South Center in late 2005, and open it in late 2006 or early 2007. Chan did not disclose the project cost.
"There is a need to revitalize the neighborhood," Chan said. "We want to offer cultural diversity."
This land once was proposed for a Target store.
A Shun Fat Supermarket, also known as S.F. Supermarket, is under construction next to the proposed shopping center. That's the same supermarket chain that anchors Pacific Plaza.
Although the supermarket isn't part of South Center, it would still serve as an anchor for the center, Chan said.
Introducing Stockton Square: North of Pacific Rim Plaza, a group of investors -- including some who own Pacific Plaza -- plans a 107,000-square-foot center and 32 single-family houses on 13 acres. A Chinese restaurant with banquet space in 12,000 to 15,000 square feet would be the anchor.
The center, which has a tentative name of Stockton Square Commercial, would have other restaurants and a mix of shops, said Philip Ta, principal with Alpha Property Development in Sacramento.
An investor in the proposed center, he was the contractor who built Pacific Rim Plaza and helped build Pacific Plaza. Most of the center would house Asian businesses, Ta said, but the developers also would seek national mainstream shops.
The architect is Clapo Hom & Dong Architects Inc. in Sacramento. Ta wants to be able to break ground in April 2005 and open in early 2006.
Pacific Rim opens up: Some of Pacific Rim Plaza's 28 tenants began opening last week. All tenants should be open by the end of this month, said Vu, an eye doctor and developer.
Within six months of posting a sign for the project, the center was 95 percent leased, he said.
The Vu family investment group owns eight other retail centers, most of which are ethnic centers.
While having lunch at Pacific Plaza during a visit to Sacramento, Vu was struck by how busy the center was. Soon after, he looked into buying the empty land across the street. The demand for space in Pacific Rim Plaza has exceeded his expectations, he said.
Pacific Plaza's Ly questions the tenant mix at Pacific Rim Plaza, with its multiple drink sellers, including tapioca drinks.
Initially, Vu said, "we were concerned as well." But he convinced his drink tenants to diversify. One tapioca drink seller also will offer Internet gaming, while another will also sell a roasted duck snack, Vu said.
Another shop is focusing on smoothies, while still another will sell sugar cane drinks.
The folks at Pacific Plaza don't feel threatened by the new and proposed competition. "Everybody is stable already," Ly said of tenants at her center.
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